Meralco, Aboitiz freeze coal power plant in Subic

Redondo Peninsula Energy Inc. put on hold the development of a 660-megawatt coal-fired power project in Redondo Peninsula, Subic, Zambales because of construction and power supply agreement issues, a top executive said over the weekend.

RP Energy is a joint venture among Meralco PowerGen Corp., Therma Power Inc. of the Aboitiz Group and Taiwan Cogeneration International Corp.

“RP Energy issued a limited notice to proceed to the EPC [engineering, procurement and construction], but we discovered we had problems with the slope, with the site and to mitigate, to fix the site, would require the site to be stable. The board decided to hold development and with that the limited notice to proceed was also cancelled on the EPC,” Aboitiz Power chief operating officer Manny Rubio said.

“This was before. Now, we are looking for alternatives, and based on the decision, we will make a decision should we actually proceed. Again, conditional to the condition of the site. It’s a construction issue, something that was not foreseen by RP Energy,” Rubio said.

Rubio said the technical problem involved “instability in one of the slopes” which needed to be addressed.

 “We really have to find a solution on that one. At the moment, it’s Meralco looking at a way to manage the movement. A number of [technologies are available], but given that the contracts are actually pending in court, I think we will make a decision also once we have clarity on the decision on the contract,” he said.

RP Energy earlier tapped Doosan Heavy Industries & Construction Co., Ltd. as its EPC contractor.

RP Energy signed a power service agreement with Meralco for a contracted capacity of 225 MW within a 20-year term on April 20, 2016.  The PSA was filed for approval with the Energy Regulatory Commission on April 29, 2016.  

Public hearings were subsequently held and were concluded on Jan. 6, 2017, but the application was still pending with the ERC.  

RP Energy and Meralco agreed to extend the date of the PSA for a period of 12 months or from April 29, 2018 to April 29, 2019.  

“If the ERC does not approve the PSA by April 29, 2019, RP Energy would then have the option to terminate the PSA.  To date, RP Energy is still awaiting the ERC’s approval of its PSA,” Aboitiz Power said in a previous disclosure to the stock exchange.

RP Energy’s construction was previously delayed by the issuance of a writ of Kalikasan against the project, which has since been resolved.